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Supply Chain Industry Updates

‘In Times Like These’ — Lessons from a Very Unlucky Ship

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A not-yet-famous Ever Given, seen in Germany in 2019. (iStock/eyewave)

The Ever Given is free from its embarrassing and unscheduled port of call in the Suez Canal, released like a stubborn cork from a very expensive bottle of Champagne. But now is not the time to celebrate. Instead, the incident is widely regarded as another cautionary tale of what can go wrong with supply chains in a year plagued by capital “D” disruptions, like the COVID-19 pandemic and a freak blizzard in Texas.

“The Ever Given Is Moving But Your Supply Chain Will Not,” warned one recent headline. “Suez Canal Ship Freed, But the Pressure Points in Supply Chain, Global Trade Persist,” cautioned another.

We’re not suggesting you try to glean supply chain best practices from headlines, but notice the big “but” in both statements. It’s a reminder that Suez Canal-type incidents can take many unexpected forms, and smart organizations are always planning how to avoid or at least ameliorate them when they do happen. Because they will happen.

“Even though this blockage has added to an already troubled global supply chain, the future looks bright for those that act quickly and decisively,” advised planning software company Kinaxis in a recent blog. “It’s incumbent upon companies to explore alternatives, [and] manage inventory and service levels. The months ahead are going to be turbulent but the silver lining is that this situation will force the industry to rethink their current practices and develop sustainable alternatives to ensure the smooth movement of goods across the world going forward.”

“Supply chain management is a team sport. In times like these, it’s important to collaborate with all stakeholders — internal and external — to understand everybody’s current capabilities and desired outcomes.”

Kinaxis listed three things that could help you navigate your own disruptions:

  • Plan for ANY scenario — Writer Siddhant Nagpal recommended simulating multiple “what-if” scenarios. “Simulate anything from using different suppliers, changes in demand, delayed lead times, varied inventory levels, different shipping routes and even measure the impact of delays on your most important business metrics,” he wrote.
  • Increase collaboration — “Supply chain management is a team sport,” Nagpal observed. “In times like these, it’s important to collaborate with all stakeholders — internal and external — to understand everybody’s current capabilities and desired outcomes.”
  •  Optimize inventory levels — “As containers are stranded across the world, your inventory is delayed at best and lost at worst,” he wrote. “This calls for a systematic and statistical approach to ensure that you have the right inventory in place at the right time while also balancing the impact on your bottom line.”

Lora Cecere, founder of Supply Chain Insights, offered additional advice this week in Forbes. (Hers was the first headline mentioned above.) Cecere’s suggestions include exploring alternate forms of transportation, near-shoring your suppliers and understanding that the real issue is container availability, which is actually a much bigger concern than a single giant freighter making an unscheduled stop in Egypt.

“The removal of the blockage in the Suez Canal is not the news,” Cecere concluded. “The future headlines will be on the implications for the global supply chain that are just beginning.”

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